Why tackling ‘chronic’ unemployment legacy must be top priority for Birmingham mayor

It’s all about jobs in Birmingham, Labour mayoral hopeful Sion Simon told an invited audience at his campaign launch before laying into the city council for its many perceived failings.

Specifically, Mr Simon claimed, the council had done nothing to turn around the city’s chronic structural unemployment, which emerged in the 1980s when skilled manufacturing jobs began to disappear in their thousands to be replaced partly by unskilled low-paid jobs.

The one thing that Mr Simon and fellow Labour mayoral candidates Sir Albert Bore and Gisela Stuart can agree on is that something must be done to tackle unemployment in Birmingham and, crucially, to provide young people with the skills they will need to take advantage of new employment opportunities. This is a considerable challenge in a city where 42 per cent of 16-year-olds leave school without five A*-C GCSEs including English and maths.

Credit must be given to Mr Simon for coming up with a 10-point policy plan for Birmingham – he’s the only mayoral candidate to commit himself in detail so far – but his promise to “break the city’s chronic cycle of unemployment” by creating 30,000 new jobs can hardly be described as being at the upper end of ambition, and would not by itself solve Birmingham’s problems.

The figure is not new. It is worked out proportionately from a pledge by the Greater Birmingham and Solihull Local Enterprise Partnership to create 100,000 jobs over eight years in Birmingham, Solihull, Lichfield, Tamworth, East Staffordshire, Bromsgrove, Redditch, Cannock Chase and Wyre Forest. Mr Simon has estimated 50,000 jobs for the LEP in four years, and since Birmingham makes up about 60 per cent of the LEP, that translates to 30,000 jobs for Birmingham.

Mr Simon proposes establishing a Birmingham Future Jobs Fund, an apprenticeships scheme, and would set up a powerful inward investment and export trade programme. He is also promising to invest £100 million in small and medium sized businesses.

Mr Simon says he will be judged by voters after four years in office as to whether he has delivered on the jobs pledge. Well, good luck to him. But if he does manage to generate 7,500 new jobs a year, although welcome, that will only go small way towards solving the acute employment problems facing Birmingham.

Figures from the Office of National Statistics demonstrate vividly the size of the challenge awaiting an elected mayor of Birmingham, where 7.6 per cent of the working age population is claiming Jobseekers Allowance (JSA) against a national average of 3.9 per cent.

Ladywood, Sparkbrook and Small Heath have the highest unemployment figures in the UK and are among the worst areas for social deprivation, and that has been the case for a long time. Just under 47,000 people across Birmingham are claiming JSA, although the true out-of-work figure is higher with the city’s unemployment rate standing at 12.9 per cent and 51,808 – the highest of the Core English cities.

The jobs problem is not confined to poorer inner city areas. In Erdington ward 10.6 per cent of adults are out of work, and the figure has risen by 1.4 per cent over the past year. In Edgbaston, often mistakenly portrayed as a very prosperous area, the claimant rate is 9.4 per cent. In Kingstanding and Shard End it is 16 per cent.

Unemployment stands at an eye-watering 31 per cent in Aston and has risen by 3.5 per cent during the past year. Washwood Heath has a 31 per cent unemployment rate, up by three per cent. Nechells and Lozells & East Handsworth have 28 per cent unemployment, and Ladywood 25 per cent. In Sparkbrook, unemployment is 27 per cent and has risen sharply by 3.7 per cent.

All of these areas have a high Asian and African-Caribbean population, and all have benefitted over the years from substantial Government and council funding which has clearly not achieved the aim of re-skilling and creating new jobs. The Aston Pride New Deal For Communities scheme, for example, received £55 million, but unemployment remains as high as anywhere in the country.

Employment has tended to dominate city council cabinet meetings since the Conservative-Liberal Democrat coalition took control in June 2004. There have been ever more wild and unlikely predictions about the number of jobs that could be created by new development.

Britain’s economic woes have forced the postponement of large regeneration projects in and around the city centre. Even so, in his budget speech this year city council leader Mike Whitby conducted a grand tour of employment-generating opportunities. It is difficult to be precise, since some announcements appeared to have been double-counted, but he certainly laid claim to 150,000 new jobs over an unspecified timeframe.

Unfortunately, many of these jobs are little more than aspirational since they involve major projects that will only take place if private investors cough up, probably in the shape of the Middle East sovereign wealth funds being courted by Coun Whitby.

If the council leader is correct, and schemes like the redevelopment of New Street Station, HS2, Paradise Circus, Icknield Port Loop, Longbridge, Arena Central, Southside and the Wholesale Markets and various initiatives in the Big City Plan really do take off, then a substantial number of new jobs will be created.

But, and here’s the crunch question, how does the leader of Birmingham, whether it is Coun Whitby or Mr Simon, ensure that new jobs go to local people? How, in the first place, can they solve Birmingham’s skills crisis and improve attainment at schools? This is a “big ask”, Mr Simon admitted, before putting his faith in more investment in schools and better support for teachers.

Birmingham’s position as the economic powerhouse of the West Midlands is regarded without question as a good thing by Coun Whitby and his coalition. Paradoxically, the wealth and pulling power that the city displays may not necessarily always be working in favour of the 51,808 unemployed people.

A recent city council cabinet meeting was enlivened by a discussion about Birmingham and the Greater Birmingham-Solihull LEP, where Coun Whitby not for the first time took pleasure in announcing that powerful Birmingham should be given recognition for providing jobs for tens of thousands of people who do not live in the city.

Half of all employed people in Bromsgrove, Solihull and Lichfield travel into Birmingham to work each day, he claimed. Deputy council leader Paul Tilsley put a figure on it, stating that 162,000 people “commute into Birmingham on a daily basis and help sustain the local economy”. What he actually meant, presumably, was that people from across the West Midlands are helping to sustain the Birmingham economy, which is fine for those in work but not so good for Brummies seeking work.

To put this into some perspective, 79,000 Birmingham residents work outside of the city, leaving a net figure of 83,000 for inward workforce migration. Significantly, more than half of senior management jobs in Birmingham are filled by people who live outside of the city.

There are just under 500,000 jobs in Birmingham, but 416,000 of these are in the services industry, boosted in recent years by the opening of shopping centres like the Bullring and growth in the city’s legal and financial sectors.

To be fair to Coun Whitby, he has been responsible for forcing the council to sign agreements committing developers to attempt to give a proportion of new jobs to people in Birmingham’s poorest areas, most notably at the Bullring. He told the cabinet: “The major challenge with unemployment is to ensure that local people are skilled appropriately to take advantage of the jobs that we are creating.”

Mr Simon is right in thinking that an elected mayor of Birmingham will be judged on what he or she can do to generate jobs and improve workforce skills. How much can be achieved in a four-year period depends on various circumstances, not least the state of the economy, and the single-minded determination of the mayor to treat job creation as the number one priority.